Three decades of the one-child policy have pinched China’s demographics into the shape of an hourglass – with the elderly at the top and the youngest at the bottom. The law, which began to be phased out at the end of 2015, has created a challenge that will have significant impact on the Chinese economy in the coming years: a cohort of urban only-children who will be relied on to support two ageing parents, and four grandparents.

This 4-2-1 challenge is the future of the ‘BAT generation,’ which has grown up in a country increasingly dominated by tech giants Baidu, Alibaba and Tencent. The majority of them are in China’s 430m strong middle-class, which is projected to grow to 659m by 2030, meaning that it will eclipse the populations of the USA, Germany, the UK, France, Italy and Spain combined. As the demographic bottleneck opens up, the changing tastes of this generation will have a huge impact, not only on China but on the world at large.

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Currently, China’s millennials are flush with money – and they’re willing to spend it. Known as the 'moonlight clan’ a large group of this generation spend their entire salary every month and save little. In the past, much of this expenditure would have been on luxury retail goods from the West - Apple laptops, Gucci handbags - but that is changing. National identity and pride are strengthening, underpinned by China’s booming economy, and a push for soft power under President Xi Jinping. This includes schemes such as Belt and Road, a huge infrastructure project to create better links through Eurasia based on the old Silk Roads, and Made in China 2025, which aims to modernise the country’s industry. The latter is currently being toned down because of the trade war brewing with the United States, but is poised to play an important role over the next decade.

There has been a new renaissance in Chinese culture. Popular television programmes showcase traditional poetry and crafts, and ancient fashions are back in style. Chinese fashion designers Guo Pei and Uma Wang have found success both at home and in international circles. Recent research by McKinsey found that Chinese consumers now rank local products higher than foreign ones in nine out of seventeen categories, including beer, electronics and even fashion.

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The spending power of this demographic block means that new products and technological breakthroughs will increasingly be based on the desires and needs of China’s BAT generation, before they roll out around the world through China’s new trade connections. We’re already seeing a number of companies operating in China beginning to target the rapidly growing ACGN (anime, comics, games, novels) subculture beloved of Chinese millennials. One estimate puts the number of Chinese anime fans at 200 million, and predicts it will be a $76bn market within five years.

International brands will also have to start tailoring their products for the quirks of the Chinese market too, including the hugely important but closed ecosystem of WeChat. Adding cultural context and ‘Chineseness’ to their offerings and messaging will help.

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But, as the BAT generation gets older, their spending habits will start to change. By 2030, they will represent about 40 percent of China’s population. They will also be in charge of making purchasing decisions for their families: 100m elderly people, and 224m children.

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The 4-2-1 problem will shift towards 1-2-4. As the BAT generation reaches peak earning power between the ages of 30 and 50, they will have to juggle supporting their parents with providing for their own children, and will become more pragmatic in their spending habits.

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They will have lower disposable incomes, which means a smaller pie for luxury brands to compete for, and will instead spend more on healthcare, insurance and education for their children. International brands will start to partner with companies in these sectors to build their image, while domestically this financial pressure will spur the growth of giant rental platforms as an alternative to ownership, particularly for luxury goods, real estate and automotive.

Over the next 20 years, the Made in China 2025 project will turn the country - much maligned for being an imitator - into a true source of innovation and technological advancement. With less historical baggage than their Western counterparts, Chinese firms will find it easier to innovate and change.

At the same time, Chinese AI companies will outpace their American and European rivals, thanks to the relative openness of the BAT generation to concerns around privacy, permissive government policies, and a massive learning base in the form of the country’s huge population.

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Combined with China’s growing geopolitical and technological clout, the heft of the BAT generation will send ripples across the world economy. Belt and Road initiatives will connect China with more than 68 countries, encompassing 65 percent of the world’s population and 40 percent of its GDP.

The sands of the global economy are shifting, and as they move from 4-2-1 to 1-2-4, the changing tastes of one Chinese generation could reshape the world.

Adrian Cheng is the founder of the museum-retail brand K11 and the cofounder of investment fund C Ventures.